Switzerland contemplates e-commerce distance selling VAT threshold

Tue 17th Jun 2014

Switzerland looks set to follow the EU distance selling rules with the introduction of a VAT selling threshold for non-resident e-commerce businesses.

EU Distance Selling Thresholds

For most taxable services provided by non-residents there is no VAT registration threshold – the first € is subject to tax. However, to reduce the administrative burden for small companies and to boost the growth of the internet and EU free trade, the EU permits its member states to maintain registration thresholds below which foreign online sellers do not have to register for B2C sales. This is typically either €100,000 (e.g. France, German, Netherlands) or €35,000 (e.g . Spain, Ireland, Hungary)

Swiss VAT thresholds

Whilst Switzerland does offer the option of non-resident VAT registrations for foreign companies selling to its consumers, it insists on them registering and charging Swiss VAT at 8% immediately – books are subject to the reduced rate of 2.5%.

However, the Federal Court has now launched a public review of this requirement. The proposal is for a CHF 100,000 distance selling threshold. A draft Bill to enact the changes is being drawn up.

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